UK mortgage rule review could help first-time buyers, with risks
The FCA’s mortgage rule overhaul could open the door for first-time buyers and self-employed borrowers, but looser checks may also push more households into risk.
The Financial Conduct Authority launched CP26/18 on 9 June 2026, widening its mortgage rule review to support first-time buyers and other underserved consumers.
The review did not begin from scratch. The FCA published CP25/11 on 7 May 2025, and on 24 June 2025 continued the work to boost home ownership and support growth. First-time buyers, the self-employed and people borrowing into retirement could benefit from further changes, and the FCA's aim is to simplify mortgage rules to support sustainable home ownership and continued growth in the mortgage market. The discussion paper phase for FS25/6 closed on 25 June 2025, the feedback statement and roadmap followed on 15 December 2025, and CP26/18 invited comments by 28 July 2026.
For borrowers, the practical effect would be different depending on where the rules loosen. A first-time buyer who has been rejected under a tighter stress test could qualify if lenders are allowed to judge affordability with less rigid assumptions. That could mean a larger loan or a longer term, which usually lowers the monthly payment at the start but leaves the household paying interest for longer. A self-employed applicant with uneven income could also find the path to approval less mechanical, while someone borrowing into retirement could be offered a structure that extends beyond the age cut-offs many lenders have used.
Stricter mortgage rules came into force on 26 April 2014 after the Mortgage Market Review. In September 2022, the Bank of England’s Financial Policy Committee withdrew its recommendation on lenders’ affordability stress tests, and on 9 July 2025 the Bank of England relaxed mortgage lending rules to help boost growth.
UK Finance and the Intermediary Mortgage Lenders Association published consultation responses, and IMLA represents 56 members, including 18 of the top 20 UK mortgage lenders and about 93% of gross mortgage lending. The Money Advice Trust, whose advisers helped 156,100 people by phone or digital advice tool and 47,600 by webchat in 2024, with 2.8 million visits to its advice websites, has argued for strong safeguards to remain in place. Barclays also found first-time buyers’ preference for cheaper homes surged after April 2025 stamp duty changes before returning to more typical levels.
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